The prime minister is happy with the government’s success in creating jobs, although it may sound incredulous. For each state produces thousands of professional degree-holders every year. Andhra Pradesh alone produces close to 50,000 engineering graduates, thanks to the privatization of education. That means constant addition to the already swelling ranks of the unemployed.
Take the organized sector for example, where employment opportunities have come down sharply as a result of government reforms. The government and related fields constitute about more than two thirds of the organized sector employment. The Central government employs 32.73 lakh persons while the state governments put together employ 74.60 lakh people. As many as 3.69 lakh people lost their job in the public sector through the voluntary retirement scheme during the reforms period.
It would be impossible to deny the fact. So the government is trying to show an increase in the private organized sector employment by a few thousand in one year. But it is ridiculous to talk in terms of thousands in a country with a population of more than one billion. Yet employment in private sector has come down from 86.86 lakh in 1997 to 86.47 lakh in the 2000. However, that employment would shrink with reforms is not an Indian experience but a worldwide phenomenon
The prime minister however has not been talking about the organized sector alone. Rather, he has been intent on enjoining the youth from looking at government jobs as their only guarantee for the future. They had to look at avenues of self-employment also.
Growth means more production, which means involvement of the labour force. However, employment growth in the unorganized sector is difficult to calculate. The Economic Survey found that the work force participation rate — employment per 1,000 persons — increased both in rural and urban areas during July 2000 to June 2001. The WFPR on usual status among rural males increased from 522 to 532 and in urban areas it went up from 513 to 525. Still better results are projected. However, the female WFPR is seen to have declined from 231 to 222 in rural areas and 117 to 116 in urban areas.
Employment is being construed to have increased on account of the growth in gross domestic product and increase in foreign and domestic investment during the reforms period. But it is conveniently forgotten that the modern technology used during the high growth period which resulted in higher output per unit of labour employed, had reduced the employment potential.
It is estimated that employment elasticity, which measures the resultant employment on account of increased output, has come down from 0.52 to 0.16 now. Which suggests that the growth did not yield jobs correspondingly. The growth in population, more particularly its age group composition, calls for a realistic assessment of the employment needs. The share of population in the age group 15-59 was as high as 59.4 per cent in the total by the year 2002. And the sixty plus age group constituted about 7 per cent. That means the growth of employable persons had been increasing faster than the population growth.
The bulk of employment is in the unorganized sector. Agriculture employs 62 per cent, manufacturing 16 per cent, services 10 per cent and miscellaneous 12 per cent. But here wages are low and employment is not always full time nor available during all seasons. People in this sector are mostly illiterate and know little about their rights. Unemployment among the educated is more disastrous because the cannot establish a link between the livelihood and education.
Evidently, the current strategy will not yield jobs. The setting of targets — 10 million a year — which are never achieved is no longer working. There should be a more pragmatic approach to the problem.